Detail of Payment Plan of Arrear Amount for the Pensioners-Double Pension

After publishing the previous article on Payment Plan for the Pensioners, I received many comments and emails regarding the clarification of the same matter and I requested Mr. Amir Agha to clarify the whole situation of the Payment Plan for the pensioners. On my request Mr. Amir Agha (Who are really doing a great work for the pensioners benefit and solving their issues without any hesitation) has send me the detail of payment plan of arrear amount for the pensioners. As the Notification of the same is not yet issued yet let’s see what is the whole situation regarding the subject matter.

Detail of Payment Plan of Arrear Amount for the Pensioners

The step by step detail of the payment plan to the pensioners is as under:

Double the Pension

Most of us pensioners would already be knowing that from 1.12.2001 onwards all increases in pension were given by government on Net Pension. Earlier increases were given on Gross Pension, as enhanced by various previous increases.

Net Pension means :

Gross Pension (originally allowed on retirement with all corrections)

As enhanced by various increases in pension after retirement

Less: Commuted part of pension, for which lump commutation value was received.

Restoration of commuted part of pension was discontinued in respect of those pensioners who had opted for the 2001 Payscale-cum-Pension scheme 2001. Pensioners retiring in pre-2001 scales continued to be eligible for restoration of commuted part of their pension, on expiry of the period for which commutation value was received.

The period for which commutation value was received depends upon the age of retiring pensioner. It was 15.4649 years’ value for those who retired at the age of 60 before 1.12.2001. For restoration purposes it is rounded off to whole 15 years. Thus pensioners retiring at the age of 60 are entitled to get the restoration benefit on reaching the age of 75 years. So if their pension was 100, and they got 50 commuted, it would be again 100 upon restoration.

For persons retiring before the age of 60 years, the period of commutation value was much more. For those retiring before 1.12.2001 pension scheme, between the ages of 51 to 59, the periods range is between 22 and 16 years. So the younger the age on which one retires, the more value one gets for the part of pension which is commuted. And that younger retiree has to wait for more years than 15, before the restoration benefit can materialize.

Some pensioners moved the courts with the plea that restoration means adding back of the commuted pension with addition of all increases notified before the restoration date, which were held back on the commuted part. Otherwise, upon restoration, the commuted-and-restored half part of the pension would be less than the un-commuted half part enhanced by increases. That is not the spirit of restoration, as upon restoration, both halves of pension should be equal. In other words, upon restoration, the pension should be double of amount of un-commuted part, as enhanced by all increases.

This needs somewhat detailed explanation and illustration through figures. So let us presume the basic data in respect of Mr. Pensioner, who retired on 10.1.1996 at the age of 60 years and got half his pension (Rs.1,000) commuted.

Mr. Pensioner

Grade 16

Born on

10.1.1936

Retired

10.1.1996

Gross

2,000

A

Commuted

1,000

B

Un-commuted

1,000

C

Increases in pension before 1.12.2001 were given on A, the Gross Pension, as enhanced by previous increases. In this illustration, the first increase Mr. Pensioner received was on 1.3.1997. That increase as well as the 1999 increase both were given on A, the Gross Pension as under :-

Date

Increases

With increase

Less commuted

Net

%

on

Rs

Before 1.12.2001

1.3.1997

10

2,000

200

2,200

1,000

1,200

1.7.1999

25

2,200

550

2,750

1,000

1,750

From 1.12.2001 onwards, increases were given on B Net Pension. So the increase on 1.12.2001 was given on Rs.1,750, while Gross was Rs.2,750. All subsequent increases were also given up to 1.7.2011on B Net, till the commuted part of pension was restored on 10.7.2011, as per table below:

Date

Increases

With increase

Less commuted

Net

%

on

Rs

Before 1.12.2001

1.3.1997

10

2,000

200

2,200

1,000

1,200

1.7.1999

25

2,200

550

2,750

1,000

1,750

From 1.12.2001 onwards

1.12.2001

5

1,750

88

2,838

1,000

1,838

1.7.2003

15

1,838

276

3,113

1,000

2,113

1.7.2004

8

2,113

169

3,282

1,000

2,282

1.7.2005

10

2,282

228

3,510

1,000

2,510

1.7.2006

15

2,510

377

3,887

1,000

2,887

1.7.2007

20

2,887

577

4,464

1,000

3,464

1.7.2008

20

3,464

693

5,157

1,000

4,157

1.7.2009

20

4,157

831

5,989

1,000

4,989

1.7.2010

20

4,989

998

6,986

1,000

5,986

1.7.2011

20

5,986

1,197

8,184

1,000

7,184

total increases

6,184

Petitioners pleaded with the courts that on restoration date (in this example 10 July 2011), both the halves of pension (commuted as well as un-commuted) should be of the same amount when totaled along with all increases. In actual practice, denial of increases on commuted part from 1.12.2001 had resulted in commuted half (along with increases) being much less than un-commuted half. Let us first see the commuted half that rose to Rs.2,540 along with increases of Rs.1,540 up to 1.7.2011. It will be noticed that increases from 1.12.2001 onwards were given on that amount (Rs.375) which increase had already been given earlier on the commuted part also.

Date

Increases

With increase

%

on

Rs

Increases from 1.12.2001 onwards allowed only on Rs.375 increase before 1.12.2001

1.3.1997

10

1,000

100

1,100

1.7.1999

25

1,100

275

1,375

1.12.2001

5

375

19

1,394

1.7.2003

15

394

59

1,453

1.7.2004

8

453

36

1,489

1.7.2005

10

489

49

1,538

1.7.2006

15

538

81

1,619

1.7.2007

20

619

124

1,743

1.7.2008

20

742

148

1,891

1.7.2009

20

891

178

2,069

1.7.2010

20

1,069

214

2,283

1.7.2011

20

1,283

257

2,540

total increases

1,540

On the other hand, total increases up to 1.7.2011 on the un-commuted half were as high as Rs.4,645 (Rs.3,105 more than on commuted part) as per details below.

Date

Increases

With increase

%

on

Rs

On Un-commuted part C = Rs.1,000

1.3.1997

10

1,000

100

1,100

1.7.1999

25

1,100

275

1,375

1.12.2001

5

1,375

69

1,444

1.7.2003

15

1,444

217

1,660

1.7.2004

8

1,660

133

1,793

1.7.2005

10

1,793

179

1,972

1.7.2006

15

1,972

296

2,268

1.7.2007

20

2,268

454

2,722

1.7.2008

20

2,722

544

3,266

1.7.2009

20

3,266

653

3,920

1.7.2010

20

3,920

784

4,704

1.7.2011

20

4,704

941

5,644

total increases

4,645

This plea was accepted by the Supreme Court and government was directed to grant all those increases on commuted half also, which had been denied earlier, so that upon restoration, both halves of pension should be equal. However, no arrears for period prior to restoration date were allowed.

In compliance of Supreme Court directions, government had finally to give all increases on commuted half of pension also, upon its restoration, which had earlier been denied, but no arrears were payable before the restoration date. In other words, all increases on commuted half of pension were also calculated on notional basis, and the net result added to restored pension from the restoration date. Through these increases, calculated from 1.12.2001 onwards, but given effect from the date of restoration, both halves of pension were brought to the same / equal figure.

Cumulative increase of Rs.3,105 was thus given in lump from the date of restoration (10.7.2011 in this case) to make both halves of pension equal. This difference may be explained to comprise the following increases on commuted Rs.1,000 from 1.12.2001 onwards:

Date

Increases not given

With increase

%

on

Rs

On Commuted part B = Rs.1,000

1.12.2001

5

1,000

50

1,050

1.7.2003

15

1,050

158

1,208

1.7.2004

8

1,208

97

1,304

1.7.2005

10

1,304

130

1,435

1.7.2006

15

1,435

215

1,650

1.7.2007

20

1,650

330

1,980

1.7.2008

20

1,980

396

2,376

1.7.2009

20

2,376

475

2,851

1.7.2010

20

2,851

570

3,421

1.7.2011

20

3,421

684

4,105

total increases

3,105

Punjab government has so far been contesting this concession to its pensioners on the grounds that its pension rule are independent of federal government rules. However, it has finally agreed to give the benefit to its pensioners, and has submitted a plan under which the benefit would be given to concerned pensioners in different time phases.

Actual notification by Punjab government is awaited till this write up on 9 Jan 2015.

i want to confirm the position of recomutation of pension and payment of different allowances which are not calculated in my pension as i retired at the age of 60 years on 01-02-2007.
PLEASE REPLY ME AS SOON AS POSSIBLE AND ALSO SEND ME THE COPY OF NOTIFICATION

Dear Kamran suppose an employee retires on 01-01-2015 at the age of 60 years then after 15 years his pension will be restored. At the time of calculation of pension at the time of retirement at now 65% of the gross pension is granted to the employee and the remaining 35% is commuted. At the time of restoration the pensioner will get 100% benefit of pension instead of 65%. It means 35% will be restored.

AOA
My question is that what about he pension of PTCL pensioners who retired before the privatization of PTCL. thay are still not draw the actual pension which was increased by the FG every year since 6-7 year.
regards

A.O.A
my father was retired as a school teacher in 1996 and at this stage it was still having 51 years old an died in 1999. my moyher is now recieving faily pension.can mu mother is illigible for this scheme

Thanks a lot for sharing the news and whole procedure. Its a noble task for old pensioners. I have two questions:

1). My father retired from Pak Army in 1984 after serving 32 years. Now my Mother is getting pension after father's death in 1986. Is she eligible for this scheme and arrears. CMA Lahore will process the case and what documents are required?

2). My Uncle retired Pak Army before 1970 after serving around 32 years. My Aunt was getting pension after death of my uncle in 2004. After my Aunt's death in 2012 I am the nominee as I closed her pension account after getting arrears in 2013. Kindly explain Am I eligible after closing account and what is the procedure for getting these arrears.

Amir explained the detail of payments in very good manners.please elaborate the position of those pensioners and widow pensioners who retired before 1990.wether they can get increases on commuted pension?

I must appreciate to mam and Mr. Amir who did once again a splendid work, we salute both f you. My question is now that what about those who retired after 2001 is there any suggestion in pipeline to restore their pension too or what??